PART 1 of 2
If you're not following the somber shenanigans at the New York trial involving Reza Zarrab, you should be. He's the young Turco-Iranian businessman originally charged in Miami with helping Iran evade sanctions via Turkish banks. The arrest was in March last year. He ultimately turned states-evidence and is now the star witness in a case whose gasp-inducing revelations may yet bring the Trump and Erdogan regimes to their knees – with a few other notables in between. Such as General Flynn who allegedly promised to free Zarrab in return for $15 million from Erdogan. Or Rudolph Guiliani who, it's believed, met with Turkish officials in order to free Zarrab with a prisoner-exchange deal as Zarrab's lawyer for some months.
Flynn's predicament pivots on whether he agreed to a quid pro quo while on the transition team or, even worse, while acting as a US cabinet minister. His predicament becomes Trump's if Flynn informed the President of the offer and set any sort of corrupt process in motion with Trump's knowledge. And since Flynn himself has turned states evidence in the Mueller probe, who knows what may come out. As for Guiliani, strictly speaking he may not have breached any laws though he apparently failed to mention in a court filing that Zarrab's dealings abetted Iran. Indeed, Guiliani went further. He claimed that the case had no serious national security implications for the US. One could argue that Guiliani's position looks especially icky because in theory Zarrab was paying him with ill-gotten sanctions-busting funds.
So much for the gossipy inside-Washington aspect of the case, for now. We'll get back to that. In fact, there's a far larger story beneath the hole-in-corner pocket stuffing tale of corrupt officials, a wider story that no one is telling as yet. One that has strategic implications, regionally and globally. Russia, the Middle East, Qatar, Saudi et al. But first some context. Erdogan stamped his foot mightily to free Zarrab for months, while extolling him at home as a national hero, a martyr and so on. As soon as the prisoner flipped, pled guilty and started testifying, Erdogan impounded Zarrab's assets and family's properties all over Turkey. In recent days, Zarab was officially denounced as a spy. Then Erdogan suddenly took to the airwaves to denounce anyone expatriating hard currency to foreign parts.
Let's unpack all that. You need to know that the Turkish President is directly fingered in the trial papers – they name his family explicitly. Zarrab donated massively to Erdogan's wife's charity and did business with his son. And above all, the trial judge has admitted as evidence the splendidly histrionic recordings leaked in 2013 of Erdogan telling his son Bilal to get rid of tens of millions of dollars in the house because of a corruption investigation. Erdogan was then merely Prime Minister and the Turkish state could launch quasi-honest probes that might incriminate him. In one recording he asks his son if it's all been cleaned out and the son replies whining 'all but 30 million euros.. we havent managed to deal with that' – much to his father's disgust. Hard to hide so many euros. An outraged Erdogan, at the time, dismissed the recordings as fake, as attempts to blackmail him and harm Turkey. He got away with it. The point is, the presiding trial judge in New York sent the recordings for expert examination and has deemed them genuine.
This alone may reverberate loudly enough in Turkey to damage Erdogan fatally but it's hard to predict in a muzzled media environment. Parlaiment still has relative freedom of speech and the opposition party, CHP, has just announced details of secret Erdogan family accounts in the Isle of Man. The funds, it appears, were transferred there by the same national bank that dispersed Zarrab's dark money, with the signature of the same bank manager. But a phenomenon is at work in Turkey, as it is in the US, where partisan thinking intensifies daily and grows ever more impervious to facts, because facts themselves lose their quiddity, their lapidarian certainty in an atmosphere of widespread paranoia where nothing can be agreed on as impartially true. Here we have the triumph of a Putinization process, for he pioneered it in Russia, where regime-loyal media float one conspiracy theory after another until the population feels totally addled and people get locked into their own reality bubbles. Finally they grow weary and fatalistic. They're grateful for a strongman at the helm.
Witness the very recent anti-American fever manufactured by the state accusing the CIA of crafting the failed coup attempt of 2016. The Istanbul Public Prosecutor's office on December 1, issued an arrest warrant for a retired academic and one-time CIA officer, Graham Fuller, now pushing 80, for planning the entire thing. It's manifestly transparently absurd. Among other things, he's accused of launching the show from an island near Istanbul on coup night when, in fact, he was continents away giving a speech to a packed auditorium. Much of the information about CIA involvement, it turns out, came from the Russians. Alexander Dugin ('Putin's Rasputin') appeared in person on Turkish state television asserting the conspiracy and claiming that Russian officials gave the details to Turkish authorities. Here is an article outlining the preposterous story. What you need to grasp crucially is the recurring pattern because we have seen it now in several countries, in Russia, in Georgia, in Venezuela, in Turkey and increasingly in the US. Once the Kremlin dirty tricks machine gets a foothold the process falls into grooves: designated bogeys, waves of conspiracies, timed distractions, confused citizens, politicized state institutions, pyramidized economies run by oligarchs and so on. This one was timed, no doubt, to pre-empt the Zarrab revelations.
Erdogan's crackdown on hard currency expatriation is also very Putinesque. Remember when Putin went through a phase of insisting that people bring their money back home? In Erdogan's case, he knows one thing above all – that if the economy collapses before he is irreversibly ensconced the public will oust him. The flow of money going abroad from Turkey is becoming a stampede. The local currency will soon implode. Meanwhile, so much of the Turkish economy is hard-currency indexed from rents to cars business transactions that a shortage of it will be devastating, . For years, under Erdogan Turkey has survived through temporary inflows of funds from the Gulf and the circulation of black money in the system, that is money from Iran, Iraq, from Syrian and other refugees, from illicit oil and much else. But the Gulf is changing radically. The Saudis' anger toward Iran grows daily. They cannot be pleased with Erdogan's exploits with Zarrab and the hundreds of millions acquired from breaching Iran sanctions. Erdogan has publicly sided with Qatar in the Saudi-Qatar dispute.
As I write this, the Zarrab trial has gifted Erdogan a kind of EZ Pass – Zarrab himself was taped on the phone from jail telling a Turkish contact that in the US you had to 'lie to get out of jail – even if you're innocent'. Doubtless, this will be hugely amplified in Turkey, where of course the judicial process is immaculate, as proof that Zarrab was forced to implicate Erdogan falsely. How this accords with Zarrab's official new status as a bad guy spy for the US, you go figure. It doesn't. But that's how you befuddle the public. Zarrab will now undergo cross examination at some length. That story will be featured in Part Two.
